Strong property firms begin scooping up foundering projects, firms

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As real estate firms continue to become mired in unprofitable development projects, many of Vietnam's larger property brokers are now pouncing on bankrupt projects and foundering firms, VnExpress reported on August 23.

At the beginning of August, Vina Property Development Group acquired the Novotel Phan Thiet Ocean Dunes and Golf Resort, a four star hotel located in the central province of Binh Thuan.

Two weeks later, C.T Group acquired Thien Loc Investment and Trading, and became an owner of a 5,900 square meter lot in Ho Chi Minh City's District 9. Towards the end of the first quarter, C.T Group also picked up the C.T Sphinx Golf Club & Residence, a 500 acre golf course project west of the city, by acquiring a 95 percent stake in GS Cu Chi Development Company.

Francis Hung, general director of Fresh View Consultancy, attributed the recent rash of acquisitions to the floundering real estate market.

The housing market has been in decline in Ho Chi Minh City since 2009 and in Hanoi since the second half of 2011.

In early June, Minister of Construction Trinh Dinh Dung declared that "the property market is reaching its bottom".

If these acquisitions are successful, they will benefit developers and homebuyers alike by bringing housing prices and availability in line with genuine demand, Hung said.

In the past, complicated procedures hindered such takeovers. But the procedures are much simpler now, said Tran Nhu Trung, deputy director of Savills Hanoi.

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Most of the companies involved in mergers or takeovers do not want their names to be made public except when they are forced to do so, according to Dang Van Quang, director of Navigat Real Estate Consulting Company.

They are afraid that people will associate the trading with "company's bankruptcy" or "company's loss", Quang said.

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